Jun 22, 2023

Fuel Price Projections for 2023 and Beyond

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Fuel is one of the most significant costs associated with running a fleet, and with fuel prices fluctuating amid the Russia-Ukraine war, many fleet operators are concerned about what the future of fuel prices looks like.

If you're a driver, business owner, or just someone who's interested in keeping up with the latest trends in the fuel market, you're in the right place.

In this article, we'll take a deep dive into the factors that are likely to impact fuel prices in the coming year.

What Factors Influence the Prices of Fuel?

There are two main factors which influence the price of fuel:

How Crude Oil Prices Influence Fuel Costs

Crude oil is used to make petrol and diesel, which is why the cost of crude oil directly impacts petrol and diesel prices.

Put simply, the reason why fuel prices are still so high is because the cost of a barrel of oil has risen. Following Russia’s invasion of Ukraine last year, and the sanctions of Russia’s oil exports, the cost of crude oil rose to over $105 per barrel in February 2022- more than double the cost in 2020. By March 2022, the price of oil had reached over $137.72 per barrel.

Despite just 8% of the UK’s oil imports coming from Russia, British drivers are still seeing increases after Western leaders who typically rely on Russia’s reserves pledged to source their oil from alternative sources.

Fortunately, by August 2022 the price of oil started to fall and dropped under $100, finishing the month at $90.63

Fuel Price Projections for 2023

As we entered the new year, prices came down even further, and the assumed inflation increase in Fuel Duty for 2023-24 did not go ahead due to the cost of living crisis.

With a barrel of oil costing $72.50 at the start of May 2023, fleet operators have taken a sigh of relief, but what is the fuel projections for the coming months?

Businesses have been cautioned by RAC about the likely increase in prices, as the OPEC+ oil producer group revealed plans to reduce daily oil production by two million barrels.

This reduction in the availability of raw materials for diesel and other fuels is expected to cause a significant surge in prices, potentially reaching an estimated 190p per litre.

How to Reduce Business Fuel Expenses

Given the anticipated increase in fuel duty, it is more important than ever for businesses to find strategies to minimise their fuel consumption and keep operating costs at a minimum.

One highly effective approach is the adoption of vehicle tracking devices such as Fleetsmart in your fleet. Here's how fleet vehicle tracking can help you lower fuel costs.

Monitor Driving Styles

It may surprise you to learn that driving style has a significant impact on the amount of fuel a vehicle consumes.

According to the Energy Saving Trust, adopting efficient driving techniques and optimising vehicle utilisation can result in annual operating cost reductions of up to 10% and fuel savings of up to 15%!

Fortunately, fleet tracking provides a powerful tool that grants you complete visibility over your fleet vehicles. It offers real-time GPS location, routing information, vehicle reports, and journey replays, enabling you to evaluate driving styles effectively.

By identifying inefficient driving practices like extended idling or aggressive acceleration, you can make informed decisions.

Utilising the insights obtained from driver behaviour data, you can take appropriate measures, such as providing additional training, to mitigate issues like heavy braking, rapid acceleration, and speeding. These actions will enhance the fuel efficiency of your vehicles.

Optimised Route Mapping

Fleetsmart's vehicle tracking system offers Advanced Mapping capabilities that enable fleet managers to strategically plan precise routes on a map.

This functionality ensures that drivers take the most efficient paths, eliminating time and fuel wastage and ultimately saving money by avoiding unnecessary detours.

Reducing Fuel Costs with Fleetsmart

Whether your fleet has 10 or 10,000 vehicles, it is essential to explore cost-cutting measures within your business, particularly when it comes to fuel expenses.

While investing in vehicle tracking may seem counterintuitive when aiming to save money, Fleetsmart tracking devices offer a smart and valuable solution.

In fact, the expected return on investment for an average business is typically achieved within 90 days, encompassing initial payments and a full year's subscription.

For fleets with significant potential for improvement, the return on investment is even faster, with average per-vehicle savings ranging from £1,000 to £2,000 annually!

Contact our team of fleet experts today to learn more about how we can assist your business in saving money.